Exam 3: Benefits, Costs, and Decisions

Jim is planning on attending a football game that costs $40.He will have to take the day off from the work losing 8 hours of work.His hourly wage is $10.He estimates it will cost him around $20 for gas and parking at the game.Jim's implicit (opportunity)cost of attending the game equals

In the short-run:

Fixed costs are

A manager invests $400,000 in a technology to reduce overall costs of production.The company managed to reduce their cost per unit from $2 to $1.85.This affects

James used $200,000 from his savings account that paid an annual interest of 10% to purchase a hardware store.After one year,James sold the business for 300,000.His accountant calculated his profit to be:

A manager invests $400,000 in a technology to reduce overall costs of production.The company managed to reduce their cost per unit from $2 to $1.85.Ceteris peribus,if the firm continues its production in the same economic environment,the firms accounting profits should

A car dealership union negotiates a contract that dramatically increases all salesmen salaries.If one of the salesman is thinking of changing careers to be a hardware salesman,his opportunity cost

When a firm ignores the opportunity cost of capital when making investment or shutdown decisions,this is a case of

All the following are examples of accounting costs,except

All the following are examples of variable costs,except

A business owner makes 1000 items a day.Each day he/she contributes 8 hours to produce those items.If hired,elsewhere he/she could have earned $250 an hour.The item sells for $15 each.Production does not stop during weekends.If the explicit costs total $150,000 for 30 days,the firm's accounting profit for the month equals:

Scott used $4,000,000 from his savings account that paid an annual interest of 5% to purchase a hardware store.After one year,Scott sold the business for $4,100,000.An Economist calculated his profit to be:

Accountants and Economists differ in their calculations of profits in that the former consider

"Buy now,pay later" or "try it before you buy it" are examples of

The fixed-cost fallacy occurs when

A company currently sells 10,000 units at $9/unit and makes $20,000 accounting profit.Variable costs currently stand at $6 per unit.By how much would variable costs have to increase before the company makes zero accounting profits?

A business owner makes 50 items a day.Each day he/she contributes 8 hours to produce those items.If hired,elsewhere he/she could have earned $10 an hour.The item sells for $10 each.Production does not stop during weekends.If the explicit costs total $10,000 for 30 days,the accounting profit for the month equals:

Opportunity costs arise due to

Jim is planning on attending a football game that costs $40.He will have to take the day off from the work losing 8 hours of work.His hourly wage is $10.He estimates it will cost him around $20 for gas and parking at the game.Jim's total economic cost of attending the game equals

A business incurs the following costs per unit: Labor - $125/unit;Materials $45/unit and rent - $250,000/month.If the firm produces 1,000,000 units a month,the total variable costs equal